Journal of Accountancy

A monthly publication of the American Institute of Certified Public Accountants focusing on the latest news and developments related to the field of accounting, and written for CPAs and other accounting professionals.

Articles from Vol. 196, No. 5, November

A Good Deal Depends on Preparation: CPAs Can Help Client-Owners of Closely Held Entities Tidy Up Their Businesses for a Sale
Even the most workaholic proprietors eventually want to take it easy, develop an exit plan and turn their business assets into cash. The decision to let go is a big one, and a CPA business valuator can help the client sell the company on the most advantageous...
Bankruptcy and S Corporation Pass-Through
Although there are some signs the economy is improving, many businesses continue to fail. Recently the Tax Court considered the effect of an S corporation's selling an asset while in bankruptcy. All S corporation shareholders contemplating filing for...
Change Your Attitude to Rev Up for Success
Pricing for services and billing appropriately is one of the most important skills in the successful practice of accountancy. However, you need to understand first how your attitude and habits hold you back. The number one problem facing accounting...
Court Says Unallocated Support Payments Are Alimony
Generally, whether a payment is alimony depends on IRC section 71(b). Alimony and separate maintenance payments (collectively referred to as alimony) are taxable to the recipient and deductible by the payor. When a taxpayer makes support payments under...
Directory of AICPA Selected Services
Address and employment information can be changed online through www.cpa2biz.com ("Member Services", tab, then link for paying dues). Or, members can e-mail, mail or fax the information to Member Satisfaction in New Jersey. In either case, the Journal...
Don't Overlook Government Accounting
Out of a love for the work I had performed as a bookkeeper, I began to study accounting and earned my accounting degree at a relatively "old" age. When researching positions in the profession, I quickly discovered the horrendous hours and travel requirements...
Exposure Drafts Outstanding
Exposure Drafts Outstanding (This list was complied as of October 1, 2003. For exposure drafts issued after that date, consult The CPA Letter. Note: The policy for updating the list of exposure drafts is that a document should remain on the list until...
Follow the Greenback Road: Criminal's Downfall: What Good Is All That Loot If You Can't Spend It?
With a sixth-grade education, legendary gangster Al Capone thought he was smart enough. By the time he was 26, "Scarface" had 1,000 employees and a weekly payroll of $300,000. In the 1930s, when the average American worker made about $2,400 annually,...
Funding Medical Expenses: Alternative Ways to Pay Medical Bills
Taxpayers needing to fund large and/or ongoing medical expenses should explore tax-minimizing ways to pay them beyond deducting them under the 7.5% of adjusted-gross-income threshold. Potential alternative funding vehicles are described below. CPAs...
Help Clients Keep 401(k) Plans Up to Date
Often the responsibility to review a company's retirement plan falls on its accountant. CPAs can use this checklist to help their employers or clients determine whether they should update their 401(k) to meet participants' needs. The following suggestions...
How to Take the Revised CPA Exam: An Online Tutorial Helps Candidates Prepare for the New, Computerized Test
In September the JofA began a series of articles exploring different aspects of the new CPA exam. These stories offered insights into how the revised test differs from the paper-based exam and the ways in which it benefits the public interest. Future...
In Excel, Cell Names Spell Speed, Safety: Give a Cell a Name, and Your Work Will Go Faster and Be More Error-Free
Which of these two spreadsheet formulas would you more easily remember and would be less likely to cause typing lapses? =Sales-Expenses or =R3-T9 The first is a hands-down choice because it's composed of word descriptions (Sales-Expenses)...
In the Money? Some Companies May Be Due an Employment Tax Refund
For years the IRS has insisted companies collect and pay Social Security, Medicare and unemployment taxes on all severance payments they made to former employees after a layoff or termination. About 13 years ago, CSX Corp. challenged this established...
Investment Adviser Advertising: For the Uninitiated, the SEC's Complex Rules Can Have Unintended Consequences
In the competitive field of investment advisory services, effective advertising can make the difference between an adviser's success or failure. Government agencies, including the SEC, heavily regulate the form and content of investment adviser advertising....
Losses Trust Deducted Were Not from Passive Activity
IRC section 469(a)(1) defines a passive activity as one involving the conduct of any trade or business in which the taxpayer does not materially participate. In section 469(a)(2), the statute describes a taxpayer as any * Individual, estate or trust....
Materiality Considerations: Audits of Government Financial Statements Just Got More Complex
Few issues involving financial statements in conformity with generally accepted accounting principles (GAAP) have been more elusive and difficult for preparers to address and resolve--or of greater importance--than that of materiality. For auditors...
Official Releases: SOP 03-2 ... Attestation Interpretations ... SSARS Interpretations
Space considerations prevent publishing here the appendices to SOP 03-2. Since the appendices often are important to understanding SOPs, readers are advised to obtain complete copies. To obtain a copy of SOP 03-2 (product no. 014937), contact the AICPA...
Reasonable Compensation
Determining what constitutes reasonable compensation is a longstanding issue for C corporations. IRC section 162(a)(1) allows a deduction for reasonable compensation for personal services actually rendered. The IRS views unreasonable salaries as disguised...
Task Force Makes Recommendations about Council's Functions
The seven-person group of AICPA members appointed in February to study the role and responsibilities of the Institute's governing body sent its findings to council in September. As part of its analysis, the task force solicited comments from AICPA...
Tax Services after Sarbanes-Oxley: How to Cope in an Uncertain Present
In response to the public outcry for enhanced investor protection, Congress enacted the Sarbanes-Oxley Act of 2002. Among other things it created new penalty and enforcement powers for the SEC--which subsequently issued audit rules--expanded the accountability...
Technology Q&A: A Fast Way to Increase Type Size ... Fill a Page with Dummy Text ... How to Suppress ScreenTips in Word ... Automatically Install Windows XP Updates ... How to Create a Blank Screen Pause in PowerPoint ... How to Respond to Invitations to Turn off Spam ... Customize Drop-Down Menus ... A Better Way to Split Data from an Excel Cell
WORD Q. Is there an easy way to increase the size of type in a Word document? I hate going into the Format screen every time I want to make a change. A. There are several ways. If you have the font display in your toolbar, which looks like this:...
The Profession's Roots: Reestablishing Integrity as CPAs' Primary Focus Is Job No. 1 for the New AICPA Chairman
For S. Scott Voynich, a CPA's most important asset is his or her reputation for honesty and fairness. It's not that the new chairman--who assumed his post in October at the Institute's annual meeting--doesn't recognize the value of competence. As managing...
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